Monday, March 05, 2007

The Changing Face of Agriculture

There are about 320,000 farms in Armenia, a number that has remained roughly steady over the past decade. Given a population of about 3 million, this is quite sizable and reflects the privatization policy of the early 1990s whereby farms were distributed to the workers and members of the various state cooperatives and collective farms.

The agricultural sector has made significant gains in output over the past decade, virtually in all sub sectors (see here). Grain output as well as that of fruits, vegetables, and eggs grew by over 50 percent between 1995 and 2005. A similar pattern is also observed for available poultry and pigs. Notwithstanding the advances made, the agricultural sector is undergoing serious changes in organizational (or rather ownership) structure.

Local businesses have been making steady inroads into this sector, as suggested by the statistics reported in the various publications of Armstat. For the most part, these commercial enterprises account for less than 5 percent of the output. But they do account for 12 percent of the potato and 20 percent of the grain output. In the case of poultry, however, they account for about 40 percent of the 5 million chicken available to be brought to market. Similarly, they account for about 45 percent of the eggs produced.

The share of Commercial Organizations in Poultry Output

Undoubtedly the commercialization of the agriculture sector has great benefits. [Not sure how many commercial entities are engaged in this sector, but I assume ownership is highly concentrated.] It is potentially more efficient and cost effective to cultivate the land by commercial entities than by the farmers and villagers each with their own small plots. But is there a risk that the latter will be (are already) displaced, thereby exacerbating rural poverty? Are the commercial entities truly more productive? Is anyone writing on the subject?

[March 10: Graph is replaced -- it disappeared again]


Anonymous said...

While no economist, I do believe that the agricultural future in Armenia is vital to the longterm sustainabilty of rural Armenia. Privatization and the current increase of medium to larege-scale businesses in the sector, with little assistance to the villager working his plot, seems to suggest that villagers are selling off their land to these larger operations that have the resources to farm the land more effectively. If this is the case what is the future of the rural villages and their sustainability? What, if any, info is there regarding cooperative farming bodies in the ROA?

David said...

You raise important questions. I am not aware of any formal steps taken to deal with the fallout from the expansion of large operations in rural areas. I am hoping that some of our ag people may shed some light on the consequences and severity of the changing landscape.

Anonymous said...

I also wonder if there are any stats regarding migration of people from rural to urban areas as a result of "economic dispossession" of villagers. Will Armenia, in this regard, go the way of other developing countries and see Yerevan double in population? I know that many from rural sector just leave Armenia totally...

Anonymous said...

, Approaching , Agro-processing
Armenian Food Sector Struggles to Comply with EU Standards


, Armenian on-line investigative journalism community, brings up-to date overview of EU standards compliance in food security and acquis driven approximation in food safety and phyto-sanitary measures (SPS), being a key priority within Armenian AAP/Association Agenda.

The overall picture is not all grim. Intra - institutional scramble on SPS implementation framework has been seemingly solved; Handful of inspirational success stories in fruits processing and domestic, EU recognizable organic certification is provided. Still is better far better compared to neighbouring Georgia with virtually non SPS in place.

Additionally note that Armenian Ministry of Economy has developed a paper called Draft Strategy for the Reform of the Republic of Armenia’s Quality Infrastructure (2010-2020) (the English and Armenian texts can be accessed at It is currently in the phase of public consultations and will be submitted for the approval of the Armenian Government in mid autumn.